Boom lifts Cavalier's fortunes 60 per cent

The housing boom in Australia and New Zealand has lifted carpet maker Cavalier Corp's half-year profit by 60 per cent.

The company on Thursday reported a profit of $9.2 million for the six months to December 31. Revenue rose 21 per cent to $95 million.

"Our best estimate for the full year now is for a tax-paid operating surplus of about $17 million provided there is no dramatic change in the operating environment," the company said.

Directors declared a fully imputed second interim dividend of 7.5c per share (compared with 5.75c per share last year after adjusting for a two-for-one share split).

Earnings before interest and tax (ebit) for the period were $15 million, an increase of 51 per cent on the December 2001 half.

The company, which exports more than half its products , noted a "very strong contribution" from the Cavalier Bremworth carpet operation, where ebit of $13.8 million was up 41 per cent on the previous year.

"The level of demand for Cavalier Bremworth products has been extremely high on both sides of the Tasman. A combination of buoyant market conditions and ongoing market share gains has seen demand stretch our capacity to supply."

The company reported a maiden ebit of $1.1 million from its Ontera Modular Carpets carpet tile subsidiary in Australia.

Cash flow was strong, and operating and investing activities netted a combined surplus of $10.1 million, after allowing for the acquisition of the shares in Ontera Modular.

Return on shareholder funds was just under 22 per cent, which the company said compared favourably with 14.4 per cent for the first half of last year and 16.6 per cent for the full year to June 2002.

Cavalier shares closed up 5c at $3.75.



NZPA